Virginia Governor's Race Overshadowed by Scandal

Democrat Terry McAuliffe and Republican Ken Cuccinelli are locked in a tight race in the off-year gubernatorial contest to succeed Republican Gov. Bob McDonnell in Virginia.

The campaign is expected to be filled with negative attacks, as McAuliffe and Cuccinelli jab each other over their close, personal connections with a sputtering business venture (for McAuliffe) and with a tobacco company executive under federal investigation who has given about $18,000 in donations (for Cuccinelli).

The stakes are high in Virginia, a swing state that voted for Obama in the past two presidential elections, but elected McDonnell the year after Obama’s victory. The race is a leading indicator of the political landscape heading into the 2014 midterms.

But as the race begins to take shape—Cuccinelli went up with his first TV ad Monday—it's is not yet revolving around the issues that Virginia voters say they care about. (That would be the economy, education and taxes, according a March Quinnipiac University poll). Instead, Cuccinelli is attacking McAulliffe on GreenTech, the auto company the Democrat chaired and quietly resigned from in the midst of corporate struggles. Virginia business officials declined to bid on the company because they worried about its business model. McAuliffe, meanwhile, is aggressively hitting Cuccinelli for failing to disclose financial gifts from the head of tobacco supplement company Star Scientific. It's a complex connection that has sucked in Gov. Bob McDonnell, who is now being investigated by the FBI over his connection to Williams.

So, as the plot thickens in the Virginia governors race, here’s an explainer of what’s going on and what it all means.

Q: What is GreenTech? What was McAuliffe's relationship with the company?

A: Officially known as GreenTech Automotive, the company manufactures eco-friendly cars at a plant in Horn Lake, Mississippi. McAuliffe, who appeared at a ribbon cutting with his friend Bill Clinton last year, chaired the company until July 2012. But he only made his severance from the company public, according to the New York Times.

Q: Why is GreenTech politically damaging for McAuliffe?

A: McAuliffe is hinging his campaign on his record as a businessman and jobs creator. (In his failed 2009 campaign for governor, he once said he created more than 100,000 jobs.) But he’s still arguing he knows how to create jobs. It’s in that context that his resignation as chairman of GreenTech matters. The company underperformed expectations, with McAuliffe saying last year GreenTech would employ 900 people in Mississippi by the end of the year. But the firm employs only 78 in Mississippi and 10 people in Virginia.

Virginia officials were given the chance to bid for a GreenTech plant to be built in the state, but they had “grave doubts” about the firm’s business model, the New York Times reports. The Cuccinelli campaign is seizing on McAuliffe’s link to GreenTech, compiling a 58-page report of opposition research. Chris LaCivita, Cuccinelli’s political strategist, told the paper the campaign intends to make GreenTech an issue in the campaign.

Q: How does McAuliffe defend himself against the claims that his job-creator credentials are undermined?

A: McAuliffe cast his involvement with GreenTech as a business risk. He told the New York Times: “How many people start electric car companies?” he said. “How many do it in a recession?” As my colleague Beth Reinhard reported, Cuccinelli has tried to exploit the same tactic the Obama campaign used against Mitt Romney in 2012. His Democratic allies push back against the notion that McAuliffe is a businessman in the same vein as Romney. “Trying to distort Terry McAuliffe’s business record can’t be as effective because he supports policies that would benefit the middle class,” former Obama deputy press secretary Bill Burton toldNational Journal earlier this month.

Q: Let's move onto to the scandal dogging Ken Cuccinelli. What is Star Scientific? And why is it under federal investigation?

A: Star Scientific is a nutritional supplement company that marketed a cigarette-substitute lozenge and also applied for a patent that could be used to produce e-cigarettes. But since December, it has recast itself as a dietary supplement maker. It is under federal investigation because of securities issues, according to The Washington Post and Richmond Times-Dispatch. Several of the firm's directors have been subpoenaed as part of an investigation into securities transactions, including private placements since 2006, the Times-Dispatchreported.

Q: Why does Star Scientific matter in the campaign?

A: The company’s CEO, Jonnie Williams, whom Cuccinelli said he met in 2009, has given the attorney general gifts that total $18,000, according to the Richmond Times-Dispatch. Cuccinelli failed to disclose Williams’ and Star Scientific’s gifts, which in addition to the cash, included a stay at Williams’ Goochland County house and a $1,500 Thanksgiving dinner in 2010. Cuccinelli also recused his office from handling a case involving Star Scientific and a $707,000 tax bill because of his connection to Williams, the Virginian Pilot reports. Cuccinelli’s attempts to cast himself as straight-laced could be undermined by his repeated failures to disclose the gifts, political grist that McAuliffe used to call for stricter rules governing disclosure of political gifts.

Q: How does Cuccinelli defend his disclosures and what does he say about his connection to Williams?

A: Cuccinelli chalked the failed disclosure up to an oversight. "I declared everything I remembered when I filled out the forms," Cuccinelli said, according to the Virginian Pilot. "It happens that some of the things I forgot were Jonnie Williams related." Cognizant of the potential political blowback from failing to disclose the gifts, Cuccinelli is calling for changing the rules governing disclosures. He said he’ll seek to require officials’ immediate family members to report gifts and wants to simplify the disclosure forms, The Pilot reported.

Q: How is Bob McDonnell implicated in the scandal?

A: A former governor’s mansion chef, Tom Schneider, is facing felony embezzlement charges stemming from his time at the executive mansion. Schneider, in a motion to the court, requested information be released regarding Williams’ relationship with McDonnell because Williams picked up the $15,000 catering tab for the wedding of the governor’s daughter. Given his already fraught connection to Williams, Cuccinelli sought to recuse his office from the case. Cuccinelli spokesman Brian Gottstein said the defense counsel’s motion politicized the case, according to the Washington Post, which is why he sought the recusal. Now, the FBI is investigating the relationship between McDonnell, his wife Maureen, and Williams, and Schneider ispetitioning to have the case dismissed because Cuccinelli has a conflict of interest, Schneider argued.